If you are betting on a drop in prices to buy the new apartment of your dreams, you are not out of the woods. Despite the real estate crisis that has been going on for two years now, the prices of new homes are not falling. Or very little: they fell by 1.1% on average in France in the second quarter of 2024, over one year, according to data released by the Federation of Real Estate Developers (FPI) this Thursday, September 5. They are thus remaining at nearly 5,000 euros per square meter, the same level as when the real estate crisis began, just two years ago.
This average, however, masks a disparity between the Île-de-France and the other regions. In the former, new home prices fell by 5% in the second quarter, while they stagnated in the provinces. This is normal, as they had risen significantly in the Paris region before the start of the crisis.
However, new homes are far from being snapped up like hotcakes. Sales fell again in the second quarter, by almost 9% over a year, with high interest rates preventing many French people from having their mortgage application accepted.
So why aren’t new property prices plummeting for good, as is the case for old properties, where they have fallen by almost 4% over the year to the end of June according to Fnaim? Quite simply because new property prices, unlike old property prices, are not determined by the law of supply and demand alone. Developers must in fact pass on to prices (…)
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